The Residential Tenancies (Amendment) Act 2021 (the 2021 Amendment Act) was signed into law on 11 December 2021. An interesting reform brought about by the Act is that it provides for tenancies of unlimited duration. All new tenancies created on or after 11 June 2022 will become tenancies of unlimited duration once the tenancy has lasted more than six months and no notice of termination has been validly served on the tenant. This contrasts with the Part 4 tenancy which was created under previous legislation.
A ‘Part 4 tenancy’ comes into existence after a residential tenancy has run for a period of 6 months. The tenant then becomes entitled to stay in the property for a further 5 and a half years subject to limited exceptions for termination by the landlord. At the end of the 6 year period, a landlord is currently entitled to terminate the tenancy without having to rely on a specific ground for termination. The 2021 Amendment Act brings an end to that entitlement. This ensures that these tenancies can only be terminated by the landlord if one or more permitted grounds for termination exist. Such rights of a Landlord to terminate a tenancy include the landlord or his/her family moving into the property, the landlord selling the property and the landlord changing the use of the property. However, at the end of the 6 year protection period a landlord has had a statutory right to terminate the Part 4 tenancy without reason.
The Amendment Act removes the landlord’s statutory right to terminate all new Part 4 tenancies created on or after 11 June 2022 without reason at the end of 6 years, so that the protection from termination provided for such Part 4 tenancies is of unlimited duration.
This means that Part 4 tenancies created on or after 11 June 2022 may only be terminated by the landlord exercising their statutory rights (subject, importantly, to any more favourable terms agreed with a tenant in a tenancy agreement).
For Part 4 tenancies created before 11 June 2022, unless a landlord consents to such a tenancy being of unlimited duration, the landlord will still have a right to terminate those tenancies on the expiry of the 6 year protection period that applied to that tenancy when it was created, but must actively do so by serving the required notice in advance. If the 6 year protection period applicable to such a Part 4 tenancy simply expires without the tenancy being actively and validly terminated by the landlord, a new Part 4 tenancy of unlimited duration will arise on the same terms as the previous tenancy. Importantly, in calculating any termination notice period to be given subsequently in accordance with the landlord’s Rights, the duration of the tenancy under any tenancy of unlimited duration and under any preceding Part 4 tenancy and/or further Part 4 tenancy must be added together.
The Amendment Act makes no changes to the tenant’s statutory rights to terminate a tenancy.
Transitional measures are provided for in the Act in relation to the conversion of existing tenancies to tenancies of unlimited duration over time